Dogecoin Faces Key Support Test as Downtrend Continues

The most popular memecoin Dogecoin [DOGE] lost its ability to recover from losses because the crypto failed to secure support between $0.36 and $0.38. Since December 2021 Dogecoin lost 13% in market value till February 17.

Traders now focus their attention on $0.215 because the level acts as an important support point for them to identify a turnaround. During late January DOGE entered a stronger bearish market style while dropping below its main trend line at $0.305.

The token market trend stayed down because traders failed to defend the 50% Fibonacci retracement level. During my writing session Dogecoin remained near the 78.6% retracement level at $0.215.

Bitcoin’s Influence on Dogecoin’s Market Movement

Over March 2024 DOGE managed to resist buying pressure within this barrier at $0.215 and $0.2. The area stands ready to help traders enter new positions as part of their buying strategy. The whole crypto market relies substantially on Bitcoin”s performance as a major influence.

A drop in Bitcoin value would create more difficulties for the alternative token market leading to decreased value for DOGE. The current market downturn makes this moment a possible buying opportunity as on-chain data shows purchasing signals from investors.

The Mean Coin Age and Market Value to Realized Value metrics mentioned by Santiment indicate investors are adding DOGE to their wallets. The MCA chart shows that over the last three months investors have held onto their DOGE coins for longer periods at a continuous rate.

MVRV Ratio at Lowest in Three Months: What It Means

Investors seem confident about Dogecoin since they hold onto their tokens rather than selling them. The MVRV ratio shows a negative value of -31% which stands as the lowest mark in three months. The majority of Dogecoin owners urgently need to sell their tokens which typically suggests that buying power is building ahead.

The data shows how most investor groups increased their total DOGE numbers except for one category. The group with 100,000 to 10,000,000 Dogecoin has grown in its holdings but at a slower rate than small retail investors. Major DOGE holders with more than 100 million coins are distributing their holdings which suggests these whales are reducing their positions.

Each year Dogecoin releases five billion new coins into the market which causes inflation in the system. Although the number of addresses holding DOGE has grown steadily in February it shows that the buying force remains strong despite the current price condition.

The market for DOGE stands on a vital threshold as its price nears a vital support point. Dogecoin could start its upward path again when traders hold and protect the $0.215 area successfully. Bitcoin”s pricing pattern alongside general market sentiment will greatly affect how the memecoin performs during the short term.